I was taking a long, slow walk down memory lane the other day, rooting around in some old Real Estate of Mind columns, when I re-read this one from May of 2005. Hindsight can be a sobering, 20-20 experience… I thought I’d share a little bit of it…
I’m much b-b-b-better, thanks. My rehabilitation has come a long way. I can actually utter the word b-b-bub-bub-bubble now with only a bit of a stutter and without feeling completely overwhelmed by guilt and remorse for bringing up such a taboo real estate subject in public.
Bub-bub-bub-bubble. It has a rhythmic ring to it doesn’t it? An inherent onomatopoeia – specially when I take my finger and flick the front of my lower lip up and down while mumbling my real estate of mind missive.
Since I began blowing up the bubble question last week, there’s already been a front page story in the Chronicle sounding the alarm about the huge number of interest-only loans being issued in the Bay Area – 60% of the total this year- at a time when our housing mania seems to be seriously surging over the top.
Such bastions of wisdom as Fortune 500 and Money Magazine have devoted considerable space in their May editions to examining the speculative nature of further real estate investment. Warren Buffet, the Oracle of Omaha, has stepped up to the podium and waded into the vast smorgasbord of opinion feeding our heads on the subject. Many of you out there have also been kind enough to email me your favorite mystifying quotes from Alan Greenspan and a bevy of other well-known economists posing their own particular slants on the bubble question.
Greenspan is wandering around the economic landscape like a drunken sailor alternately denying a bubble exists: “housing conditions are scarcely tinder for a speculative conflagration,” acknowledging concerns about “froth in the housing market,” and ominously using those obfuscating double negatives: “We don’t perceive there is a national bubble, but it’s hard not to see that there are a lot of local bubbles.”
I don’t know about you but images of froth and a lots of local bubbles brings to mind belches coming out of bloated beer bellies and the telltale signs of over-indulgent flatulence rising to the surface of the frat house hotubs and bathtubs. (By the way folks, this is just a lowly advertorial column. I appreciate all the thoughtful feedback, and high-minded discourse but how do you know that I’m not setting you up for my latest “make millions on real estate foreclosures scheme?” Just kidding, I think : – )
At any rate, it is clear that the “bubble” and other things suspiciously “bubble-like” are bubbling up in a steady stream from the collective consciousness. Google currently has 2,270,000 entries logged under ‘real estate bubble’.
If it looks like a bubble, walks like a bubble and bubbles like a bubble then it probably isn’t a duck.
But here’s the trouble with bubbles. They are tricky things. Even if we skip over the question of whether or not there is one, we are still stuck with the difficulty of defining
exactly what “it” is or exactly what “it” looks like. By nature, bubbles are malleable. They float. They bend light and reflect rainbows. They appear and they disappear into thin air. They take many shapes and forms. You can see through them but you can’t quite touch them.
Bubble-sayers and Bubble-nayers. There’s a whole cast of characters out there stepping up to the mound to pitch us their best spin, couched behind a phalanx of logic and arguments and experiences and wishes and dreams and hopes and fears and expectations. If our heads aren’t quite doing Linda Blair 360’s yet, they are sure bobbing and weaving to the leitmotifs of the mosh pit.
Since so many people believe that reality inevitably follows perceptions created in the media – there are a lot of players competing for our hearts and our minds in the psychological battle
of the bulging bubble.
Next week we’ll round up the usual bubblehead suspects ranging from, those hardy souls that do believe in the bubble but also believe that they can time it just right – to those closet Howard Ruffs out there, already packing their survival gear and digging up their krugerrands from coffee cans in the back yard – to those still polishing their jewels of denial and singing the la-la-la song loudly to themselves – to all those others still enjoying the bubbly of the champagne bottle they just uncorked after their last big bazillion dollar sale.